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To: Step1 who wrote (1760)	6/12/1999 5:33:00 PM
From: Investor2	Read Replies (1) \| Respond to of 3536

You seem to be relatively negative on the outlook for the Japanese economy and stock market. Are you in the majority or the minority, as far as overall opinion in Japan? That is, is the consensus outlook negative? Best wishes, I2

To: Step1 who wrote (1760)	6/13/1999 5:58:00 PM
From: Henry Volquardsen	Read Replies (2) \| Respond to of 3536

A lot of the projects are rammed through or seem to be very poorly planned . So, while the last GDP numbers looked good, there is absolutely nothing long-term in this kind of spending, and my feeling is, if it fails, this time they are in big trouble, being at the end of that alley (public works). Absolutely. The Japanese have done a pretty poor job of trying to prime the pump through public works projects. They have gotten this type of GDP spike in the past and there has been little follow through. Definitely it appears they are pushing on a string. Also with the aging of their population and the psychological hit of unemployment hitting unprecedendant levels, for them, it is reenforcing a tendency to save. So much for utilizing the excess capacity by releasing pent up demand. But from your location you will get a better feel for that dynamic. FWIW I am not a perma bear on Japan, I believe some of the issues you mention will eventually bear fruit. I'm just a bit skeptical about the current situation. Also reagrding your potential external problems for Japan, my own opinion is that 1) while a correction is certainlt likely, I doubt we will see a crash in US markets anytime soon. 2) I believe the possibility for yen appreciation is limited. 3) the Chinese have made some very strong arguements as to why they will not devalue and I have a strong suspicion they will be able to pull it off for the foreseeable future. Of course these are all opinions <g>